I was surprised by the market reaction. These sorts of divestments can take years as there is a dearth of buyers out there with cash. The market will be underwhelmed by the slow pace of the process. I was surprised that Anglo made a $1m loss from Amplats, as it just worked down its inventories so should have made a profit.
DES KILALEA | RBC CAPITAL MARKETS
By firming up on what has been discussed by management Amplats has clarified its strategic direction. This is positive for the company and for controlling shareholder Anglo American as poor returns from the platinum division have been a major drag on Anglo American’s financial performance.
EDWARD STERCK | BMO CAPITAL MARKETS
Net debt has increased significantly. At the end of June, Amplats reported net debt of 12.4bn rand (£680m), up from 11.5bn rand in December 2013. With production restarting, a significant amount of cash is expected to be tied into building working capital in the near term and is likely to weaken the balance sheet further.